What we discovered from ABI Research's study into the NFC Tags market

We'd like to applaud ABI Research for a fantastic study into the current uses of silicon-based Near Field Communication (NFC) Tags across different industries, and the future of the field. The name of the study - 'NFC Tags Ready for the Mainstream' - does a neat job of summarising the findings, but in this blog, we would like to delve a little deeper into the results of the research.

ABI Research noted the widespread use of NFC within smart devices; from smartphones to speakers, smartwatches and gaming consoles. It acknowledged that the most commonly known purposes of the technology is in Contactless payments, Contactless ticketing, product interactions and the pairing of wireless devices. The study highlighted the continual growth of NFC technology, and the increase in the number of NFC Tag features, which has been concurrent with the decrease in costs. This, ABI Research says, has led to an explosion in new market opportunities across a diverse range of sectors.

Contemporary NFC Tag Use Cases

It was interesting to read that ABI Research has identified proximity marketing to be NFC Tags' biggest emerging market opportunity. This refers to the embedding of NFC Tags in everything from Smart Posters to Clothing Labels, allowing smartphone users to simply tap and engage with targeted content before and after making a purchase. These interactions were described as "positive and rewarding," and the researchers underlined that there are many practical uses of NFC Tags in the consumer context - from verifying the authenticity of products, to help with configuration of products and after sales care. ABI Research has made the prediction that these 'connected products' containing embedded NFC Tags will grow to become the largest part of the NFC Tags market. From increased consumer interaction to product authentication, and adding after sales value - the potential of NFC Tags is plain to see.

The researchers confirmed: "ABI Research expects the connected product category to grow rapidly over the next couple of years, as the first larger-scale deployments of NFC Tags help pave the way for others to follow, and trials and pilots begin to scale up to larger deployments."

Emerging NFC Tag Applications

The study highlighted two areas of NFC Tag technology which are expected to emerge over the coming years. The first is increased sensor integration, allowing variables like pressure and temperature to be monitored more than ever before. This capability, the researchers say, is likely to be of particular interest to companies in the fields of medicine, smart packaging and logistics. Increased sensor integration can open up new possibilities in terms of tracking the life of a product, ensuring that it has been stored correctly during transit. This could apply to anything from a bottle of wine, pieces of meat to pharmaceutical products. With just a simple tap, consumers can confirm that a product has reached them in good condition.

The second emerging application highlighted is Internet of Things (IoT) device provisioning. What NFC Tags provide to IoT elements with no displays or buttons - such as smart bulbs or motion sensors - is a way to connect them securely to routers, access points and gateway devices. This allows smart devices to be integrated easily into home networks. There are also security advantages when it comes to commissioning applications.

NFC Tag Market Forecasts

As is often the case with studies of this nature, the findings which make the headlines might be the market forecasts which ABI Research has calculated. ABI Research is confident of strong growth in the NFC Tag market over the next few years. It foresees cumulative NFC Tag shipments across the uses highlighted in the study to reach the 10 billion unit mark by the year, 2023, up by around six billion from 2018's level.

The researchers explained the forecast: "ABI Research believes that the next few years will see a significant expansion in NFC Tag deployments and opportunities. While it is difficult to estimate how quickly the technology will expand, it is clear that many of the barriers to NFC adoption are being removed, including cost, scalability, integration challenges, mobile compatibility, and increased smartphone penetration."

What is driving brands owners towards NFC Tag technology?

So what is behind the current continued growth of the consumer market for NFC Tags, and the expected spike over coming years? According to ABI Research, increased consumer engagement is a big factor, offering the opportunity for marketers to build relationships with new and existing customers. This includes the ability to captivate consumers with more engaging forms of media - such as video and audio - and gather intelligence through data capture.

Pre-purchase, ABI Research pointed to the ability of NFC Tags to provide consumers with information such as product uses and reviews. After the point of sale, the study underlined the big role NFC Tags can play in extending the customer relationship, offering a plethora of options for engagement - from competition entry to future discounts, personalised gift messages and warranty registration.

NFC Tags also allow brands to protect themselves better, which in turn can provide reassurance to the consumer. This is thanks to the methods of anti-counterfeiting, supply chain tracking and brand protection which NFC Tags provide.

The time is now

ABI Research concluded with the assertion that silicon-based NFC Tags are primed for use in the mainstream consumer goods market: "NFC Tags are better equipped than ever before in terms of cost, scalability, flexibility, interoperability, and compatibility, in addition to having a mature and wider ecosystem to help ensure that NFC Tags can be quickly and effectively integrated into high-volume products."